CEE MARKETS 1-FX regain ground with forint in lead, crown lags

                                
 PRAGUE, Aug 10 (Reuters) - The Polish zloty and Hungarian
forint led gains for central European currencies on Monday on
the back of more risk taking among investors, while the Czech
crown lagged on a larger than expected drop in inflation.
                                
 The Czech crown <EURCZK=> added 0.1 percent to 25.807 to the
euro, and the zloty <EURPLN=> rose 0.6 percent to 4.095 per
euro, returning near its highest levels since January.
                                
 The forint <EURHUF=> led gains with a 0.65 percent rise, as
the region's currencies returned to stronger levels after a dip
last week.
                                
 "On Friday US payroll data were better so the forint firmed
sharply to 269 from around 273," a Budapest currency dealer
said. "This morning there seems to be risk taking in the
world... so I think the trend reversed and the forint will
cautiously firm."
                                
 Stock markets were mixed on Monday, with Budapest <.BUX> up
1.5 percent, while Warsaw's blue-chip index <.WIG20> dipped 0.3
percent.
                                
 Currencies regained some footing late on Friday after
stronger than expected U.S. jobs data, with the forint and zloty
benefiting the most due, respectively, to Poland's better
economic fundamentals and Hungary's higher yields. 
                                
 The zloty, picked by analysts in a Reuters poll last week to
outperform peers going ahead [ID:nL5168081], has swung the most
in the past year, at one point losing a third of its value.
                                
 The Polish unit has risen 6 percent since July 1 while the
forint, crown and Romania leu <EURRON=> are flat. Some analysts
said the zloty was technically set to break below 4 to the euro
for the first time since the start of January.
                                
 "The technical picture points towards a EUR/PLN move below
4, which would certainly not be unrealistic if the positive
global sentiment continues in the coming days," Danske Bank
analysts said in a morning note.
                                
 In Hungary, where interest rates stand at 8.5 percent even
after a larger than expected 100 basis point cut two weeks ago,
the higher yield has benefited assets in the summer risk rally,
and some debt funds are favouring the market to peers.
[ID:nL6354636]
                                
 The view is in contrast to the Czech Republic, which cut
interest rates to a new low of 1.25 percent last week. Data on
Monday showed inflation slowed much more than expected to an
annual 0.3 percent, which some analysts said left a window for
further easing. [ID:nL797796]
                                
 "It was a clear sign of the problems in the Czech economy
still prevailing on the bearish side. There is still room for
another rate cut," said a Prague dealer.
                                
 
--------------------------MARKET SNAPSHOT--------------------
Currency                    Latest   Previous Local    Local
                                
                                  close    currency currency
                                
                                           change   change
                                
                                           today    in 2009 
Czech crown      <EURCZK=>   25.807   25.84   +0.13%   +3.67%
Polish zloty     <EURPLN=>    4.095    4.119  +0.59%   +0.49%
Hungarian forint <EURHUF=>  267.98   269.73   +0.65%   -1.65%
Croatian kuna    <EURHRK=>    7.321    7.333  +0.16%   +0.6%
Romanian leu     <EURRON=>    4.202    4.203  +0.02%   -4.46%
Serbian dinar    <EURRSD=>   93.38    93.27   -0.12%   -4.18%
All data taken from Reuters at 0947 CET.
Currency percent change calculated from the daily domestic 
close at 1500 GMT.
                                
 
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 (Reporting by Reuters bureaus, writing by Jason Hovet; editing
by Chris Pizzey)